In a notable move on October 19, 2023, the Federal Energy Regulatory Commission (FERC) directed the North American Electric Reliability Corporation (NERC) to submit altered or new Reliability Standards. These standards aim to address the impacts of inverter-based resources (IBRs) on the reliable operation of the Bulk-Power System. This endeavor is considered integral as the country transitions towards an extended use of clean energy technologies.
Significantly, the Final Rule also addresses certain IBRs connected to the distribution system. While the exact details remain the subject of an ongoing discussion, the motivation behind this move is clear – to ensure the steadfast operation of the grid as advances in clean energy technologies proceed.
FERC’s directive follows a growing consensus among industry insiders concerning the potential vulnerabilities of the Bulk-Power System. Acknowledging the increasing incorporation of IBRs – be it solar photovoltaic, wind turbine, or battery storage technologies – into the grid, the focus now lies on ensuring the continued reliability of the grid. It is reasonable to anticipate further scrutiny and regulatory action in this area considering the current administration’s strong commitment to clean energy transition.
The direct implication for corporations and law firms lies in the likely ramping up of regulatory compliance requirements. Legal departments may find themselves prefixed with tasks addressing potentially new or modified compliance standards that come with the integration of IBRs into existing grid infrastructure.
Given the gravity and complexity of the matter, corporations and legal professors across the globe are advised to keep a close watch on future developments steered by FERC’s directive. Further updates and comprehensive details will be reported as they unravel.
To gain a deeper understanding of FERC’s directive, readers are encouraged to refer here.